The parent company of Evian Natural Spring Water has landed a win in a case over “carbon neutral” marketing claims that could have implications from companies across industries. In an opinion and order last month, a New York federal judge sided with Danone Waters, dismissing a class action lawsuit accusing it of deceptively labeling its Evian bottled water as “carbon neutral.” The plaintiffs had argued that Evian’s use of the “Carbon Neutral” label along with a “Carbon Trust” logo improperly creates the impression that Evian generates no carbon emissions, thereby, misrepresenting the environmental impact of the company’s manufacturing process, which generates carbon emissions despite its offsetting efforts.
A Bit of Background: Judge Nelson S. Román of the U.S. District Court for the Southern District of New York initially refused to grant Danone’s motion to dismiss the plaintiffs’ unfair competition, breach of warranty, unjust enrichment, and fraud suit, in part, on the basis that “carbon neutral” is a term that is “unfamiliar to and easily misunderstood” by reasonable consumers and that its inclusion of qualifying language on the back of Evian bottles and in its website would not cure consumer confusion.
The court held that “carbon neutral” is an ambiguous term and that a jury should decide whether it could be misleading to a reasonable consumer. Siding with the plaintiffs in his January 2024 order, Judge Román was persuaded by the plaintiffs’ claims that “‘carbon neutral’ is precisely the type of’ unqualified general environmental benefit’ claim” that “may be unfair or deceptive as an unqualified or not clearly explained environmental marketing claim,” according to the Federal Trade Commission’s Green Guides.
The judge also gave weight to a survey commissioned by the plaintiffs, which showed that consumers generally do not understand what “carbon neutral” means.
Fast forward to November 14 and the court granted Danone’s partial motion to reconsider and dismissed the plaintiffs’ California and Massachusetts state unfair competition claims, as well as their breach of express warranty, unjust enrichment, and fraud causes of action. In his more recent decision, Judge Román held that reasonable consumers could be expected to look on the back of Evian bottles for more information about its “carbon neutral” claims.
Judge Román further distinguished the more recent finding from the earlier decision by delving into the FTC’s Green Guides, and “what sort of claims should not be made” by companies in furtherance of their marketing efforts. The court stated that “carbon neutral” differs from buzzwords like “eco-friendly,” “greener,” “eco-smart,” and “environmentally friendly,” which are “general and vaguer than the term ‘carbon neutral,’” and “convey a wide range of meanings.”
Accordingly, the court “does not find that the Green Guides support the conclusion that ‘carbon neutral’ is a misleading claim,” Judge Román stated, dismissing the plaintiffs’ claims – albeit with leave to amend.
THE TAKEAWAY: For brands across industries, the ruling “offers some relief, but caution is still necessary when making ‘carbon neutral’ or similar claims on product packaging,” Katten’s Catherine O’Brien stated in a note. “While the ruling brings more clarity, advertisers must continue to ensure that environmental claims are well-supported and accompanied by the necessary disclosures to avoid creating misleading impressions.”
In a nutshell, Kelley Drye’s Gonzalo Mon and Katie Rogers assert that the most recent outcome “suggests that if a marketer uses a term that is not inherently misleading, it could point people to a website for more information.”
Ultimately, the case serves as a reminder for companies about the importance of transparent and precise communication about sustainability initiatives. With consumer trust and legal compliance on the line, companies must strike a careful balance between promoting their environmental achievements and ensuring they do not overstate or misrepresent their efforts.
The case is Dorris v. Danone Waters of America, 7:22-cv-08717 (SDNY).
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